The HINDU Notes – 01st July 2020 - VISION

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Wednesday, July 01, 2020

The HINDU Notes – 01st July 2020

📰 Utilise MGNREGA to the fullest capacity

The scheme should not be diluted in the name of the Garib Kalyan Rojgar Abhiyaan

•The role of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) as a lifeline for the working poor in rural India has been proved once again with the experience of the lockdown. In April and part of May, it was the absence of MGNREGA which accentuated rural distress. The Central government revised lockdown guidelines to allow MGNREGA work only from April 20, nearly a month after the nationwide lockdown was imposed, and released funds for it belatedly.

•But once the money reached the States, the results are evident. Whereas the number of households who got work in April 2020 was the lowest in several years at 95 lakh, in May the number went up to 3.05 crore. Till the third week of June, 2.84 crore households had got work, much higher when compared to the same months last year. With an average 23 days of work and a daily wage of Rs. 200, households who got work earned an average of Rs. 1,500 a month. Even though this is meagre, it shows the potential of MGNREGA to bring work and relief, provided it is further expanded.

•The Central government released Rs. 38,000 crore for MGNREGA work, of which 70% has already been utilised. With the return of migrant workers to their home States and with substantial numbers having completed the quarantine period, the demand for work is bound to increase. The remaining Rs. 8,000 crore fund available to the States is clearly insufficient. It is therefore essential for the Central government to release the second tranche without delay.

Work provided to few

•Even in these months where there has been a welcome increase in workers who got work, it is extremely disturbing that as many as 1.82 crore workers who demanded work were turned back. According to figures available on the Ministry’s website, in this fiscal year, 8.07 crore workers demanded work, but work was provided only to 6.25 crore workers. Recently we heard the Prime Minister and the Uttar Pradesh Chief Minister hardsell the record of employment provision in the State claiming that one crore jobs had been provided in a single day. This is certainly a novel interpretation of statistics. What is the nature of the work? Are they permanent jobs? Are they one-day jobs such as work on MGNREGA sites can be? In U.P., over one crore workers had applied for work under MGNREGA, but more than one third of them were turned back.

•Similarly in Bihar, which also has a large number of returning migrant workers, 12 lakh workers of the 41 lakh workers who applied were turned back. In spite of a legal provision of unemployment allowance not a single rupee in compensation has been paid. Now that the monsoons have set in, this issue becomes all the more relevant. During the rainy season even though demand is high, work provision is low. It is therefore essential for the Central government to ensure that States are provided with the funds to pay unemployment allowance to all workers demanding work.

•In this context of the need to strengthen MGNREGA, the announcement of the Central government’s “new” scheme, the Garib Kalyan Rojgar Abhiyaan, to provide work to migrant workers in 116 selected districts, raises several questions. First, what is the criteria for selection? Why, for example, should the States of West Bengal and Chhattisgarh be omitted when reverse migration is particularly high in these States? Of the Rs. 4,794 crore spent between June 20 and June 28, Bihar received more than 50% of the fund. As noted earlier, Bihar has had a poor record of implementation of MGNREGA. The Bihar elections are scheduled for later this year. It will be a terrible travesty of justice if this scheme is designed to serve a narrow political purpose.

•Second, according to the list of 25 kinds of work available under this “scheme” it is clear that almost every single one of them is already covered under the convergence programmes of MGNREGA. What is the new “skill mapping” required for this since this work is already covered under MGNREGA? The nature of the work is manual work, mainly construction and earth work, including work to lay cables, ostensibly to take Internet connections to rural areas. It is unstated but clear that this will benefit private telecom companies.

•Most importantly, how will this new scheme impact the MGNREGA work in these selected districts? There is no clarity on this critical issue in the set of guidelines issued by the Ministry of Rural Development, the nodal Ministry for this scheme. Last year, under MGNREGA, in these 116 districts taken together, an average of just 43.7 workdays were created, which was lower than the national average of 50 days. This poor record of provision of work may have been one of the reasons for the higher rates of migration from these districts. Instead of new schemes why should MGNREGA not be expanded to give work to all workers? This is a legal right, whereas the Garib Kalyan Rojgar Abhiyaan has no such legal binding on the administration.

•The scheme is primarily meant for migrant workers in those districts where their numbers are 25,000 or more. That means in these selected districts women who comprise a smaller percentage of migrant workers will be largely excluded. However, women in these districts had a high demand for work reflected in the fact that the average of women working in MGNREGA in these districts last year was 53.5%, which was higher than the average for the rest of India. So unless this work in 116 districts is in addition to MGNREGA, women will suffer.

Potential for MGNREGA

•MGNREGA should not be diluted in the name of the Garib Kalyan Rojgar Abhiyaan. The potential for MGNREGA to provide relief to the suffering of rural India should be utilised to its fullest capacity. This will also require a removal of the restriction of only one person per household to make every individual eligible. The cap of 100 days should be removed to expand it to at least 200 days. Unemployment allowance should be guaranteed for all those turned away from work. And importantly, the government must ensure the release of funds on an emergency basis.

📰 In ending stand-off, magnanimity must prevail

India’s border dispute with China calls for peaceful resolution, and has no place for moral outrage or military might

•India’s oft-quoted mantra when it comes to international relations has been vasudhaiva kutumbakam (the earth is our only family). It is not in India’s DNA, so to speak, to demonise any country in its neighbourhood, including China, South Asia and South East Asia, all the way to Indonesia; that is because of long-standing civilisational ties. When Prime Minister Narendra Modi spoke in Shanghai just five years ago, in 2015, he recounted to the Indian community living there how China’s President Xi Jinping took him to his native village in Xian province and showed him the book written by the seventh century Buddhist monk, Xuanzang, whose travels connected the birthplaces of both leaders. This was symbolic, he said of the bond between India and China in terms of aatmiata (soulful intimacy), nikatata (closeness) and bhaichaara (solidarity). There could not be more genuine and sincere affirmation of the spirit of friendship.

Keep a cool head

•Presently, India is on the brink of regarding China as Enemy Number One. This has happened because of a bloody, hand-to-hand combat, without firearms, between Indian and Chinese soldiers in the Galwan Valley in Ladakh, which left 20 Indian soldiers dead and many more wounded. It may never be known how many Chinese soldiers died or were injured. These deaths on the frontier are a tragic break in an admirable record of avoiding casualties on both sides, despite face-offs on numerous occasions, along a long frontier between India and China. Both sides have accepted that the border between the two countries must be settled by agreement for the sake of peace.

•China has refused to recognise the McMahon line and the demarcation of boundaries done by the British colonial power. Pending a final settlement of the boundary, India and China signed the Agreement on the Maintenance of Peace and Tranquillity along the Line of Actual Control in the India-China Border Areas, in 1993. Another similar agreement (Agreement on Confidence Building Measures in the Military Field along the Line of Actual Control in the India-China Border Areas), signed in 1996 contains a specific clause related to the use of firearms by both sides: “Neither side shall open fire, cause bio-degradation, use hazardous chemicals, conduct blast operations or hunt with guns or explosives within two kilometres from the Line of Actual Control. This prohibition shall not apply to routine firing activities in small arms firing ranges.”

•Apparently, this provision was respected by both sides during the clash on June 15. Tragically, they fought much more barbarically, with nail-studded sticks, knives and stones, causing inhuman suffering. This incident threatens unofficial partition of territories that has stood the good test of time: Aksai Chin is claimed by India, but China, de facto, rules; China claims Arunachal Pradesh, but India, constitutionally, rules.

•Will it ever be possible to resolve the boundary dispute, which is at the root of the conflict? And if so, how? The dispute cannot be resolved by going to war. No war has permanent winners. No losers can willingly accept defeat. The only way to resolve disputes, in post-nuclear times, is through negotiations, as equal powers, with mutual respect.

China’s record

•During his visit to India in April 1960, China’s Foreign Minister Zhou Enlai made a proposal to settle the boundary dispute. It was rejected by Prime Minister Jawaharlal Nehru. In hindsight, history must record that as a lost opportunity which has had tragic consequences.

•Today, China regards itself as a superpower in the making, which implies that negotiation will be condescending, tantamount to “my way or the highway”. The more China feels beleaguered, the more intransigent it is likely to be in negotiations to resolve the border dispute with India. China has flexed its muscle. It refused to recognise the authority of the Permanent Court of Arbitration (PCA), established under the United Nations Convention on the Law of the Sea (UNCLOS). The PCA rejected China’s legal claims. It ruled that China had breached its obligations under the Convention on the International Regulations for Preventing Collisions at Sea and Article 94 of UNCLOS concerning maritime safety, and that China violated international obligations. China has not paid any heed to international opinion that supports unimpeded commerce, freedom of navigation, overflights, and peaceful resolution of disputes in the South China Sea. The same hubris has made China more intolerant of infrastructure built by India, while it continues to build its own along that frontier.

Weighing in on the options

•Should India counter China, tit for tat, by adopting a posture of aggression? Or should India redouble its diplomatic efforts to counter China’s intransigence with the support from Japan, Australia, the United States, Russia, and other countries, including those disputing China’s claims in the South China Sea?

•What must matter to India is whatever is good for its people. Focusing on strengthening military might, when the economy is suffering and COVID-19 is taking its toll, will not be wise. Nor is it wise to call for a boycott of Chinese imports. Sanctions and boycotts are justifiable only when there is strong moral justification. Boycott of South Africa during the Apartheid period was justified and it served its purpose in hastening South Africa’s turn to equality and democratic governance. Arguably, there is moral justification for sanctions against Israel if it expands its illegal settlements in the West Bank and Palestine territories. Moral outrage has been triggered by actions of regimes in South Africa and Israel. But India’s border dispute with China calls for peaceful resolution, not moral outrage.

•It is understandable, in the immediate aftermath of the sacrifice made by India’s soldiers, that nationalist ferment will come to fore. As has happened with other incidents when sovereignty seemed to have been transgressed, this one also will run its course. If India boycotts goods from China, it will hurt itself more and barely make a dent in China’s economic prospects. India is lauded as the pharmacy of the world because it is able to import essential raw materials from China. India’s sports goods exports are likewise dependent on imports from China. The world buys Chinese goods because their quality and price are compelling. It has been reported that Steve Jobs wanted to change the iPhone screen barely three days before its formal launch. China’s factory that assembled the phone for Apple mobilised its workforce to get the screens replaced in quick time. India should emulate China in its manufacturing practices and agility to adapt to international demand. There is little parity between India and China in trade terms; there is much more parity in military might, at present, compared to the 1960s.

The home watch

•It is unfortunate that in many cities in India, people from the North-east, who have features resembling Chinese, have been ostracised. India must be on guard, in the aftermath of current tensions with China, not to unleash any kind of hostility against anyone, especially resident Chinese nationals. India must learn the hard lesson, which it did not in 1962, that warm and gushing expressions of friendship towards China will not stop hostilities; only pragmatic and shrewd diplomacy can do that. Oscillating to the opposite end and attacking China as the enemy is not wise.

📰 Reviving SAARC to deal with China

Deeper regional economic integration will help India

•As India-China border tensions continue to fester, a hegemonic China, as part of its global expansionism, is chipping away at India’s interests in South Asia. This should be a major cause for concern for New Delhi. China’s proximity to Pakistan is well known. Nepal is moving closer to China for ideational and material reasons. China is wooing Bangladesh by offering tariff exemption for 97% of Bangladeshi products, and has intensified its ties with Sri Lanka through massive investments. According to a Brookings India study, most South Asian nations are now largely dependent on China for imports despite geographical proximity to India.

Reinvigorating SAARC

•Several foreign policy experts argue that India’s strategic dealing with China has to begin with South Asia. In this regard, it is important to reinvigorate SAARC, which has been in the doldrums since 2014. In the last few years, due to increasing animosity with Pakistan, India’s political interest in SAARC dipped significantly. India has been trying hard to isolate Pakistan internationally for its role in promoting terrorism in India. However, as Professor S.D. Muni argues, Pakistan is not facing any isolation internationally. India started investing in other regional instruments, such as BIMSTEC, as an alternative to SAARC. However, BIMSTEC cannot replace SAARC for reasons such as lack of a common identity and history among all BIMSTEC members. Moreover, BIMSTEC’s focus is on the Bay of Bengal region, thus making it an inappropriate forum to engage all South Asian nations.

•One way to infuse life in SAARC is to revive the process of South Asian economic integration. South Asia is one of the least integrated regions in the world with intra-regional trade teetering at barely 5% of total South Asian trade, compared to 25% of intra-regional trade in the ASEAN region. While South Asian countries have signed trade treaties, the lack of political will and trust deficit has prevented any meaningful movement. According to the World Bank, trade in South Asia stands at $23 billion of an estimated value of $67 billion. India should take the lead and work with its neighbours to slash the tariff and non-tariff barriers. There’s a need to resuscitate the negotiations on a SAARC investment treaty, pending since 2007. According to the UN Conference on Trade and Development, intra-ASEAN investments constitute around 19% of the total investments in the region. The SAARC region can likewise benefit from higher intra-SAARC investment flows. Deeper regional economic integration will create greater interdependence with India acquiring the central role, which, in turn, would serve India’s strategic interests too.

Domestic challenges

•There are two major domestic challenges that India faces in revitalising SAARC. First, to reap political dividends at home, and for ideological reasons, there has been an unrelenting top-dressing of anti-Pakistan rhetoric and Islamophobia on the Indian soil. There’s also a recurrent use of the ‘Bangladeshi migrant’ rhetoric. Such majoritarian politics influences foreign policy in undesirable ways. It dents India’s soft power of being a liberal and secular democracy, which gives moral legitimacy to India’s leadership in the region. This divisive domestic politics fuels an anti-India sentiment in India’s neighbourhood.

•Second, the economic vision of the Modi government remains convoluted. It’s unclear what the slogans of atma nirbharta (self-reliance) and ‘vocal for local’ mean. The government’s economic advisers contend that this does not mean autarky. On the other hand, the Prime Minister and his Ministers are stating that India needs to cut down its dependence on imports, thus signalling a return to the obsolete economic philosophy of import substitution. If this marks sliding back to protectionism, one is unsure if India will be interested in deepening South Asian economic integration.

•Prime Minister Narendra Modi did well by reaching out to SAARC leaders earlier this year, but such flash-in-the-pan moments won’t help without sustained engagement.

📰 Making trade more digitised

While different interventions have positively developed the port ecosystem, there are still gaps that need to be bridged

•India’s exports in April 2020 contracted by 60% year-on-year. There was a 37% fall in the twenty-foot equivalent units handled by the Jawaharlal Nehru Port in April 2020 as compared to April 2019. The steep decline in world trade lays bare the significance of a more digitised trading environment, with minimal manual touch points.

•With the pandemic, the slump in international trade is unpredictable. As countries slowly emerge out of this, new demand and supply chains will form, that will be located in countries that re-orient their existing trade structures.

Upgradation, digitisation, automation

•Globally, digitisation of procedures and lower human intervention are the two major pillars that drive trade across borders. Post India’s ratification of the Trade Facilitation Agreement of the World Trade Organization in April 2016, reforms focused on infrastructural upgradation, digitisation and automation. Schemes such as Direct Port Entry and Direct Port Delivery, and the Radio Frequency Identification system and Single Window Interface for Facilitating Trade, were all aimed at reducing the time and cost of clearance of goods. The Port Community System was aimed at seamlessly integrating all maritime trade-related stakeholders on a single platform. And e-SANCHIT (e-Storage and computerised handling of indirect tax documents) was aimed at reducing human intervention.

•These and other interventions speak of the government’s focus on effective logistics and smooth export-import (EXIM) procedures at Indian borders. This resulted in continuous improvement in India’s Ease of Doing Business ranking, particularly in the ‘trading across borders’ parameter on which it ranked 68 in 2020. With the current crisis, ports across India demand a greater leap in trade facilitation measures to expedite the movement, release and clearance of goods.

•While different interventions of the government have positively developed the port ecosystem, there are still some gaps that need to be bridged. These are particularly with respect to the standardisation and coordination of processes across ports, and awareness and acceptability of new initiatives among the users which depends on the adaptability and ease of linkage between multiple systems.

Gaps to be filled

•Some of the delay in moving to a paperless trade ecosystem can be attributed to gaps in the effective implementation of digital platforms. First, shortcomings in the functionality of the system and technical glitches result in limited use of the system or parallel use of hard copy. For example, the absence of a shipping line delivery order in customs and terminal systems results in usage of hard copy for cargo movement. Second, lack of connectivity/message exchanges between different stakeholders’ systems results in delayed cargo clearance. Third, there are many issues with respect to training and capacity building amongst the users, restricting the optimal utilisation of digital platforms.

•Like in the rest of the world, in India too the operations of multiple stakeholders in the logistics and trade ecosystem including customs brokers, shipping lines, freight forwarders, transport operators, port custodians, container freight stations and border management authorities have been restricted. This indicates the need to further augment the digital infrastructure in the trade ecosystem. With trade volumes contracting and economic indicators shrinking, the present crisis presents an opportunity to develop new systems and enhance existing platforms while at the same time changing the attitude of stakeholders on the ground.

•In the last two months, different guidelines have been issued by the government, focusing on measures to facilitate and expedite the clearance process so that it is more automated, online and paperless. While some immediate steps are needed to survive the crisis, it is imperative to work on a permanent road map which addresses some of the gaps highlighted. Enhanced integration of systems and coordination between them should ideally result in exchange of messages and sharing of input data between them on a real-time basis. Promoting use of a multi-stakeholder single platform like the Port Community System can streamline EXIM procedures, moving towards a digitally engaged and enhanced trading environment.

•These efforts will be instrumental towards improving India’s trading ecosystem and achieving the desired target of Ease of Doing Business (ranking under 50) set by the Prime Minister’s Office. The more digitised our trade facilitation infrastructure, the more immune we will be to future disruptions.